BP Seeks Higher Gas Price for Undeveloped Discoveries: Report

New Delhi: BP Plc, Europe's second biggest oil company, has sought higher natural gas price for undeveloped discoveries in KG basin and other eastern offshore blocks to make them economically viable even as it dropped broad hints that it wants an early settlement to issues pending in arbitration. BP chief executive Bob Dudley on Tuesday met Prime Minister Narendra Modi, first since the BJP-led government stormed to power last May, and followed it up with a meeting with Oil Minister Dharmendra Pradhan on Wednesday morning. The UK-based firm partners Reliance Industries in flagging KG-D6 block as well as gas discovery area NEC-25 off the east coast. It sought applicability of premium the government had promised to give to yet-to-be discovered fields, to those that have not yet been developed, sources privy to the discussions said. The government while fixing a rate based on average of international gas hubs in October last year said a premium would be paid over this price to discoveries made in deep and ultra-deep sea and other difficult fields henceforth. Sources said BP wanted this premium to apply to all existing yet-to-be developed difficult discoveries like the satellite fields in KG-D6 and finds in NEC-25. Unlike in the past, Mr Dudley wasn't accompanied by Mukesh Ambani, head of Reliance Industries, at the meeting with Modi. He dropped broad hints that BP wants an early resolution to issues pending in arbitration, sources said. BP and RIL have initiated arbitration against government move to disallow a part of the KG-D6 cost as penalty for gas output lagging targets. They last year also slapped an arbitration notice against government move not to implement the previous UPA regime's gas price formula that would have doubled the rates. "Yesterday, Bob Dudley met Prime Minister and today he met me. He promised greater engagement in oil and gas sector," Mr Pradhan said at an industry event. Mr Dudley, who had met Pradhan on sidelines of the World Petroleum Congress in Moscow in June last year, assured of "oil and gas production increasing" and greater engagement, the minister said. He however did not elaborate on discussions. "Dudley apprised the Minister of various activities of BP in India and the future plans to expand business in oil and gas sector," an official statement issued later said. "Pradhan appreciated the role played by BP in Indian hydrocarbon sector and welcomed it to increase its presence in upstream and downstream sectors in India."

BP Seeks Higher Gas Price for Undeveloped Discoveries: Report

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